Contractual Periodic Tenancy Explained – Key Facts for UK Tenants and Landlords

What is a Contractual Periodic Tenancy?

A contractual periodic tenancy is a type of tenancy agreement where the tenancy is designed to continue indefinitely on a rolling basis, typically by week or month, after the initial fixed term ends. This type of tenancy is pre-agreed by both the landlord and tenant at the start of the rental period, and it allows the tenancy to automatically renew at regular intervals without the need for a new contract.

Unlike a statutory periodic tenancy, which automatically takes effect when a fixed-term tenancy expires without a new agreement, a contractual periodic tenancy is planned from the beginning of the tenancy and is included as part of the original contract.

How Does a Contractual Periodic Tenancy Work?

In a contractual periodic tenancy, the terms of the tenancy are set out in the original tenancy agreement, which states that after the fixed term (if there is one), the tenancy will continue on a rolling basis (e.g., monthly or weekly).

• No Need for Renewal: The tenancy rolls over at the end of each period (week or month) without the need for a new contract or agreement.

• Ongoing Until Termination: The tenancy continues indefinitely until either the tenant or the landlord decides to terminate it, following the appropriate notice periods outlined in the tenancy agreement or by law.

• Notice Periods: The tenant or landlord can end the tenancy by giving the required notice. Notice periods are typically one month for tenants or two months for landlords, though these may vary depending on what is agreed in the contract or the type of tenancy.

Key Features of a Contractual Periodic Tenancy

Here are the key characteristics of a contractual periodic tenancy:

1. Pre-Agreed at the Start of the Tenancy

• A contractual periodic tenancy is included in the initial tenancy agreement. The contract will specify that after the fixed term (if applicable), the tenancy will automatically roll on a periodic basis, such as weekly or monthly.

2. Rolling Tenancy

• This type of tenancy does not have a defined end date. Instead, it continues to roll on each period (usually monthly) until terminated by the tenant or landlord.

3. Flexibility

• A contractual periodic tenancy offers flexibility for both the tenant and landlord. The tenant can leave by giving notice without waiting for the end of a fixed term, while the landlord can also regain possession by giving the appropriate notice.

4. Written Terms

• The terms of a contractual periodic tenancy, including notice periods, rent payment dates, and other conditions, are clearly set out in the original tenancy agreement, ensuring that both parties understand their rights and obligations from the outset.

5. No Automatic Rent Increase

• Rent increases cannot occur without following the procedures outlined in the tenancy agreement or giving the tenant proper notice. In most cases, rent increases during a periodic tenancy require one month’s written notice for tenants paying monthly.

Contractual Periodic Tenancy vs Statutory Periodic Tenancy

There are two main types of periodic tenancies—contractual periodic tenancy and statutory periodic tenancy. Here’s how they differ:

1. Contractual Periodic Tenancy

• Planned from the Start: The tenancy agreement includes a clause stating that the tenancy will continue on a periodic basis after the fixed term.
• Fixed Terms Not Required: The tenancy could begin as a periodic tenancy without any fixed term.
• No New Agreement Needed: The tenancy automatically rolls over based on the terms agreed at the start.

2. Statutory Periodic Tenancy

• Takes Effect After Fixed Term: A statutory periodic tenancy arises automatically when the fixed-term tenancy ends and no new agreement is signed.
• Same Terms as the Original Contract: The terms of the statutory periodic tenancy are the same as the original fixed-term agreement, except for any changes in the rent period.
• Less Certainty: Since it is unplanned, landlords and tenants may not have agreed in advance on how the periodic tenancy will function, particularly around notice periods.

Notice Periods in a Contractual Periodic Tenancy

One of the key aspects of a contractual periodic tenancy is the notice period required to end the tenancy. The notice periods must be clearly stated in the original contract and are typically as follows:

• Tenant’s Notice: The tenant is usually required to give at least one month’s notice in a monthly periodic tenancy. For weekly periodic tenancies, four weeks’ notice is typically required.

• Landlord’s Notice: If the landlord wants to end the tenancy, they must provide at least two months’ notice (for Assured Shorthold Tenancies) using a Section 21 notice. However, they cannot serve this notice during the first six months of the tenancy.

Advantages of a Contractual Periodic Tenancy

For both tenants and landlords, a contractual periodic tenancy offers several benefits:

1. Flexibility for Tenants

• Tenants benefit from the flexibility to move out without being tied into a long fixed-term contract. As long as they provide the correct notice, they can leave whenever their circumstances change.

2. Certainty for Landlords

• Landlords know in advance that their property will be let on a periodic basis and don’t have to worry about renewing contracts or dealing with statutory periodic tenancies. The clear terms also make managing notice periods straightforward.

3. Automatic Continuation

• A contractual periodic tenancy automatically continues without the need for re-negotiation or signing new contracts, making it easy for both parties.

4. Long-Term Tenants

• For landlords, a contractual periodic tenancy allows for the possibility of long-term tenants without needing to fix the length of the tenancy. This arrangement often works well for tenants who want flexibility but plan to stay for the foreseeable future.

How Fraser Bond Can Assist

At Fraser Bond, we specialise in providing expert advice on tenancy agreements, including contractual periodic tenancies. Whether you’re a landlord looking to set up a tenancy or a tenant needing guidance on your rights, our team offers:

• Tailored Tenancy Agreements: We can help draft and review tenancy agreements, ensuring that the terms of your contractual periodic tenancy are clear, fair, and legally compliant.

• Advice on Notice Periods: Our team provides advice on the correct notice periods for both landlords and tenants, ensuring smooth transitions when ending or renewing tenancies.

• Dispute Resolution: If disputes arise during a contractual periodic tenancy, we assist in mediating and resolving issues, ensuring both parties understand their rights and responsibilities.

Conclusion

A contractual periodic tenancy offers flexibility and certainty for both tenants and landlords by allowing the tenancy to roll on indefinitely under pre-agreed terms. Whether you’re a landlord seeking a hassle-free way to manage your rental property or a tenant looking for flexibility, understanding how this type of tenancy works is key to making informed decisions.

For expert advice on setting up or managing a contractual periodic tenancy, contact Fraser Bond today.